Cost of kiwifruit disease put at $885m

Kiwifruit grower Peter West, who discovered the first case of the bacteria late in 2010, was shocked to hear the report's estimates. Photo / Alan Gibson

The bacterial disease hitting the kiwifruit industry will cost hundreds of jobs and ultimately up to $885 million, according to the first damage estimate to be released.

A report on Psa-V from Lincoln University's agribusiness and economics research unit yesterday put the immediate impact of the vine-killing disease and the cost of responding to it at between $310 million and $410 million over the next five years.

The long-term impact is estimated at between $740 million and $885 million, while up to 470 jobs each year over the next three years will also be lost.

Although the scourge has already cost a number of growers their livelihoods, the report concludes that the kiwifruit industry and wider Bay of Plenty have yet to experience the full impact of Psa.

As of yesterday, 1184 orchards had been identified with Psa-V, most of them in the Te Puke region.

New Zealand Kiwifruit Growers president Neil Trebilco said an immediate concern was for those growers who had cut out their vines because of Psa-V and would miss a crop this year.

A high proportion of those growers would face serious financial hurdles raising the approximately $60,000 a hectare, excluding debt servicing, needed to re-establish their orchards with a new, more Psa-V-tolerant variety.

"The exact cost of Psa will unfold over the next few years," Mr Trebilco said.

"While the immediate priority is helping those growers worst affected by Psa, the reality is there will need to be a long-term commitment to the industry to help it rebound from Psa's significant setback."

John Burke of the industry-established company Kiwifruit Vine Health expects the worst impact will hit within the next 12 months.

"It's fair to say that growers have been talking to their banks, but to get back on their feet they've got to find that hard money.

"Bankers can do a whole lot for growers in terms of interest rates and maybe writing down some debt, but when a grower has to say, 'I have to borrow more money to re-establish', then that's when the difficulty will arise."

He told the Herald he was not surprised at the report's estimates, unlike Peter West, the Te Puke orchardist who found the first case of Psa-V in November 2010.

"It's a huge amount," said Mr West.

He said the value of kiwifruit orchards had plummeted since the outbreak.

"Now it's just a matter of us putting our heads down, carrying on and finding something that's going to be resistant and marketable."

He was already growing a new gold variety called G3, which appears to have more tolerance for Psa-V than the current Hort16A gold.

New Zealand's largest kiwifruit exporter, Zespri, said the Psa-V scourge had created a "significant problem" at the production end of the company, yet the downturn in gold kiwifruit this year was not proving a problem at the marketplace.

While the drop in gold kiwifruit harvested was expected to be between 20 and 30 per cent, Zespri expected to harvest 90 million trays of fruit this season, Zespri grower and government relations general manager Simon Limmer said.

"We just need to adjust the business accordingly now and make sure our strategic markets are still being supplied."